Ashley and Kris have come to ask you some questions regarding their 2021 tax returns. The couple lives in a common-law relationship. Kris is a chef at Mountain Hotel and Ashley is an electrician.
Kriss remuneration (salary) in 2021 was $86,000. The following information is available from Kriss 2021 T4 slip:
Deductions from pay:
CPP and EI 3,754
Registered Pension Plan Contribution 2,000
Income tax deducted 25,000
Mountain contributes an equal portion to Kriss RPP. Kris is also provided with a company car for use during the entire year. The car is leased by Mountain. Lease payments are $550 per month. Mountain pays $400 per month for the operating costs of the vehicle. Kris drove the car a total of 22,000 kilometres in 2021. 9,000 of these were for personal travel. Kris also earned $3,000 in 2021 from Mountains dining room tip pool. Lux did not report the tips on Kriss T4. CPP enhanced contribution is $166.
Kris withdrew $10,000 from an RRSP in 2021 for use other than education or home ownership. Both Kris and Ashley contribute to their TFSAs each year. They each have a balance of $8,000 in their TFSAs, bearing 3% annual interest.
Ashley earns $65,000 and is waiting for the 2021 T4 from the electrical company to arrive in the mail, so will address some other issues at this point in time which might affect the 2021 taxes.
1) Ashley sold a small piece of land in 2021 (which is capital in nature) for $68,000. The land originally cost $50,000. Selling costs were $800. Proceeds of $35,000 were received in 2021 and the remainder of the funds will be received this year (2022).
